The rate of food inflation, as measured by the Wholesale Price Index (WPI), eased to a four-month low of 16.22 per cent for the week ended March 13, primarily due to fall in prices of cereals and onions. The rate of food inflation stood at 16.3 per cent for the previous week and at 7.46 per cent during the corresponding period in 2009.
The inflation rate for fuel products rose to 12.68 per cent, compared to -6.06 per cent in the corresponding period last year. The prices of petrol and high-speed diesel oil rose at the rate of 16.82 per cent and 14.99 per cent, respectively, on an annual basis during the week.
Even as the food inflation has shown signs of moderation in the past few weeks, analysts feel the overall inflation will continue its upward trend due to rise in the prices of fuel and manufactured products. Adding to this, a low base effect will also push the overall inflation index. The Reserve Bank of India (RBI) had surprised markets last week by increasing policy rates and cash reserve ratio by 25 basis points each. Most analysts feel RBI may resort to further monetary tightening measures in the fourth quarter monetary policy review on April 20.
The overall inflation rate in February stood at 9.89 per cent and is certain to go into double digits in March, as fuel prices have risen in the month due to an incresae in excise and Customs duty announced in the Budget.
The inflation rate for cereals and pulses stood at 10.64 per cent and 31.68 per cent, against 11.85 per cent and 10.67 per cent, respectively, during the corresponding period last year.
